The futures market showed its erratic side again on Tuesday 5 June. Confidence in the market is therefore hard to find at the moment.
Despite the special start of the growing season and local extreme weather conditions, the market does not seem to have confidence in the price development of the new season. In 2 days the futures market fell back to €14, a decrease of €2,50.
Absence of summer weather
The lack of summer weather seems to be the main spoilsport. Speculators do not dare to enter now, because of the losses suffered last year. Growers, on the other hand, seem to want to hedge against any money; this for fear of a repeat of last year. The development of the old harvest also does not contribute to confidence in the price development of the coming season.
Also in the market last storage potatoes a kind of vacuum has arisen in which free growers cannot currently find buyers. Trade is still taking place, but only with growers who have co-delivery obligations (in addition to the fixed-price potatoes). And this is once again a huge attack on the nervous system of the free potato grower.
When it comes to the futures market, you don't often see such a big drop so early in the season. Demand normally arises at price levels that are around or below the fixed-price contracts. However, today he didn't seem to think so.
Is there still a foundation?
The coming days will reveal how much foundation there is still under the market. In the absence of summer weather, it will become clear how the market will develop. This seems to already be taking place in Poland and irrigation is already required in quite a few areas in the Netherlands. This is to ensure that there are sufficient numbers of plants. In other areas, the potatoes are sometimes replanted for the third time. Extremities enough, but it is not translated into the price on the futures market.